South Korea has revealed it seized a Hong Kong-registered ship last month suspected of supplying oil to the North in breach of international sanctions.
Officials said the Lighthouse Winmore had secretly transferred 600 tonnes of refined oil to a North Korean ship.
A UN Security Council resolution bans ship-to-ship transfers of any goods destined for Pyongyang.
The revelations came as China denied claims by President Donald Trump it had allowed oil shipments to the North.
But instead of going to Taiwan it transferred the oil to a North Korean ship and three other vessels in international waters on 19 October, South Korean officials were quoted as saying.
This defies a UN Security Council resolution imposed on 11 September that prohibits all ship-to-ship transfers with North Korea.
The Lighthouse Winmore was seized when it returned to Yeosu in November and remains in South Korea, South Korean officials said.
Was China involved?
There is no evidence as, although the Lighthouse Winmore is Hong Kong-flagged, it was leased by a Taiwanese company.
The Chinese government said the accusations against it were "not consistent with the facts".
"China has never allowed Chinese enterprises nor individuals to violate UN Security Council resolutions imposed on the DPRK," foreign ministry spokesperson Hua Chunying said.
China handles about 90% of the North's foreign trade.
Why was Trump riled?
There has been increasing suspicion in Washington that Chinese ships have been secretly transferring petroleum to North Korean vessels at sea.
On Thursday, Mr Trump tweeted he was "very disappointed" with China, which he said had been "caught red-handed".
Quoting South Korean government officials, the report said the illegal ship-to-ship transfers had been filmed by US spy satellites about 30 times since October.
The measures address the "illicit imports of petroleum through deceptive maritime practices by requiring Member States to seize, inspect and freeze any vessel in their ports and territorial waters for involvement in prohibited activities".
On Thursday, the UN Security Council also denied international port access to four more North Korean ships suspected of carrying banned goods, AFP reported. It would bring the total number of ships blocked by the UN to eight.
North Korea is already subject to a raft of sanctions from the US, the UN and the EU.
The latest round was sparked by the 29 November launch of a ballistic missile, which flew higher than any other the North has tested.
Mr Trump has previously threatened to "totally destroy" North Korea if it launches a nuclear attack. North Korean leader Kim Jong-un has described the US president as "mentally deranged".
Have previous sanctions worked?
They have been imposed for more than a decade with little success.
In fact, North Korea has said fresh sanctions will only make it accelerate its nuclear programme. It has continued to test nuclear and ballistic missiles despite these recent examples of UN pressure:
30 November 2016: UN targeted North Korea's valuable coal trade with China, slashing exports by about 60% under a new sales cap. Exports of copper, nickel, silver, zinc and the sale of statues were also banned
What happened next? On 14 May 2017, North Korea tested what it said was a "newly developed ballistic rocket" capable of carrying a large nuclear warhead
2 June 2017: UN imposed a travel ban and asset freeze on four entities and 14 officials, including the head of North Korea's overseas spying operations
What happened next? On 4 July, North Korea claimed it had carried out its first successful test of an intercontinental ballistic missile (ICBM)
6 August 2017: UN banned North Korean exports of coal, ore and other raw materials and limited investments in the country, costing Pyongyang an estimated $1bn - about a third of its export economy
What happened next? On 3 September, North Korea said it had tested a hydrogen bomb that could be miniaturised and loaded on a long-range missile
Keep these in mind as you contemplate the direction of the American government over the past 50 years and especially since the Obama election.
The Goals of Communism
(as read into the congressional record January 10, 1963, from "The Naked Communist" by Cleon Skousen)
1. U.S. acceptance of coexistence as the only alternative to atomic war.
2. U.S. willingness to capitulate in preference to engaging in atomic war.
3. Develop the illusion that total disarmament of the United States would be a demonstration of moral strength.
4. Permit free trade between all nations regardless of Communist affiliation and regardless of whether or not items could be used for war.
5. Extension of long-term loans to Russia and Soviet satellites.
6. Provide American aid to all nations regardless of Communist domination.
7. Grant recognition of Red China. Admission of Red China to the U.N.
8. Set up East and West Germany as separate states in spite of Khrushchev's promise in 1955 to settle the German question by free elections under supervision of the U.N.
9. Prolong the conferences to ban atomic tests because the United States has agreed to suspend tests as long as negotiations are in progress.
10. Allow all Soviet satellites individual representation in the U.N.
11. Promote the U.N. as the only hope for mankind. If its charter is rewritten, demand that it be set up as a one-world government with its own independent armed forces. (Some Communist leaders believe the world can be taken over as easily by the U.N. as by Moscow. Sometimes these two centers compete with each other as they are now doing in the Congo.)
12. Resist any attempt to outlaw the Communist Party.
13. Do away with all loyalty oaths.
14. Continue giving Russia access to the U.S. Patent Office.
15. Capture one or both of the political parties in the United States.
16. Use technical decisions of the courts to weaken basic American institutions by claiming their activities violate civil rights.
17. Get control of the schools. Use them as transmission belts for socialism and current Communist propaganda. Soften the curriculum. Get control of teachers' associations. Put the party line in textbooks.
18. Gain control of all student newspapers.
19. Use student riots to foment public protests against programs or organizations which are under Communist attack.
20. Infiltrate the press. Get control of book-review assignments, editorial writing, policymaking positions.
21. Gain control of key positions in radio, TV, and motion pictures.
22. Continue discrediting American culture by degrading all forms of artistic expression. An American Communist cell was told to "eliminate all good sculpture from parks and buildings, substitute shapeless, awkward and meaningless forms."
23. Control art critics and directors of art museums. "Our plan is to promote ugliness, repulsive, meaningless art."
24. Eliminate all laws governing obscenity by calling them "censorship" and a violation of free speech and free press.
25. Break down cultural standards of morality by promoting pornography and obscenity in books, magazines, motion pictures, radio, and TV.
26. Present homosexuality, degeneracy and promiscuity as "normal, natural, healthy."
27. Infiltrate the churches and replace revealed religion with "social" religion. Discredit the Bible and emphasize the need for intellectual maturity which does not need a "religious crutch."
28. Eliminate prayer or any phase of religious expression in the schools on the ground that it violates the principle of "separation of church and state."
29. Discredit the American Constitution by calling it inadequate, old-fashioned, out of step with modern needs, a hindrance to cooperation between nations on a worldwide basis.
30. Discredit the American Founding Fathers. Present them as selfish aristocrats who had no concern for the "common man."
31. Belittle all forms of American culture and discourage the teaching of American history on the ground that it was only a minor part of the "big picture." Give more emphasis to Russian history since the Communists took over.
32. Support any socialist movement to give centralized control over any part of the culture--education, social agencies, welfare programs, mental health clinics, etc.
33. Eliminate all laws or procedures which interfere with the operation of the Communist apparatus.
34. Eliminate the House Committee on Un-American Activities.
35. Discredit and eventually dismantle the FBI.
36. Infiltrate and gain control of more unions.
37. Infiltrate and gain control of big business.
38. Transfer some of the powers of arrest from the police to social agencies. Treat all behavioral problems as psychiatric disorders which no one but psychiatrists can understand.
39. Dominate the psychiatric profession and use mental health laws as a means of gaining coercive control over those who oppose Communist goals.
40. Discredit the family as an institution. Encourage promiscuity and easy divorce.
41. Emphasize the need to raise children away from the negative influence of parents. Attribute prejudices, mental blocks and retarding of children to suppressive influence of parents.
42. Create the impression that violence and insurrection are legitimate aspects of the American tradition; that students and special-interest groups should rise up and use united force to solve economic, political or social problems.
43. Overthrow all colonial governments before native populations are ready for self-government.
44. Internationalize the Panama Canal.
45. Repeal the Connally reservation so the United States cannot prevent the World Court from seizing jurisdiction over nations and individuals alike.
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